Banat drew its name from Banat in the Old World, an agricultural region in the southern part of Hungary.  It is said the earliest name was Lawris. G.H. Hagen, agent for the Menominee Land and Abstract Company sold land for the new settlement at Banat, 36 miles north of Menominee on the Wisconsin & Michigan Railroad. 

By 1909 Banat had 37 families, promising to develop into one of the more prosperous settlements. The settlers had been told the pine stumps were very valuable for the manufacture of turpentine, and lands were selected according to the prevalence of pine stumps.  The settlement at Banat was made in 1909-10 by Hungarian and Austrian settlers, mostly from St. Louis and headed by Frank Schmidt.  (According to a newspaper article in the Menominee Herald-Leader, 9 November 1909 issue, Banat was composed mainly of German Hungarians.) 

The village was laid out in exact reproduction of the method in vogue in the old country.  Banat was laid out with one immense building, 120'x16,' and divided into compartments.  Seven families, one to a compartment, were housed there. The original plan was to live in the village and operate the outlying farms.  This plan, however, was not successful and most of the settlers later moved their homes to their lands.  

The farms, which varied from 40 to 160 acres, were about three miles from the village.  The men and women would go to the farms every morning and return in the evening.  This unusual procedure was patterned after the villages of Hungary where settlements were always a mile or more distant. A general store building was erected and F.J. Schmidt, a leader among the settlers, tended it.  His store kept a general supply of necessaries and sold them to the settlers at cost.  

Source:  Menominee County Book for Schools, edited by Ethel Schuyler.  Menominee, Michigan: Office of County School Commissioner, 1941.